rbynaker
Level 13

AGI is at 400% level and I already have an IRA but I am still concerned about the amount of SEHI.  It is too low and if the TP has to pay back the entire premium advance shouldn't that count as SEHI?

Yes, that is considered SEHI.  Problem is that when you deduct that as SEHI it drops the AGI below 400% of the FPL.  Then the math on the 8962 changes and the taxpayer does not have to repay as much (or in some cases any) APTC.  So then you go back and reduce the SEHI deduction accordingly.  But that causes the AGI to go over 400% FPL and then all of the APTC has to be repaid.  Rinse, repeat, ad infinitum.

What about setting up a SEP-IRA?  Basically the best result is if you can beg, steal or borrow enough tax deductions to get AGI below 400% FPL.  If the insurance is HDHP, what about HSA contributions?  If there are capital gains, what about reinvesting in QOFs?  Did you already max out asset deductions with Bonus/179/de minimis election?  There are plenty of legal ways to reduce income.  If you've exhausted all of them already then you're stuck with the APTC repayment.